In order to meet the filing deadline for tax year 2012, income tax returns must be properly transmitted or addressed, mailed and postmarked by Monday, April 15, 2013.

Returns calculated with refunds can be filed up to three years after the official filing date of the return in question.

Using that information, the final date a taxpayer can file for a refund for tax year 2009 is also April 15, 2013.

Is the IRS holding onto your money?

According to a March 2013 IRA release, refunds totaling just over $917 million may be waiting for an estimated 984,400 taxpayers who did not file or incorrectly filed a federal income tax return for 2009.

However, to collect the money, a return (or an amended return) for 2009 must be filed with the IRS no later than Monday, April 15, 2013.

That same notice estimates the potential refunds to be more than $500 per taxpayer.

If no return is filed to claim a refund within that three-year window, the money becomes property of the U.S. Treasury.

Are you losing your opportunity to receive the 2009 Earned Income Tax Credit? Continue reading →

Is my Scholarship considered income and subject to income taxes?

What you use your scholarship money for may determine whether you pay taxes on it.

A scholarship or fellowship is tax-free if:

• You are a full-time or part-time candidate for a degree at a primary, secondary or accredited post-secondary institution.

• The award covers tuition and fees to enroll in or attend an educational institution

• The award covers fees, books, supplies and equipment required for your courses.

The award is tax-free only as long as you use it for the purposes outlined above. Continue reading →

What’s the deal with trusts, revocable and irrevocable?

What are the Filing Requirements for Revocable and Irrevocable Trusts?

My parents established a revocable trust years ago and the income in the trust was always added to their personal income tax, even after my mother died.

My father converted the trust to an irrevocable trust in 2011 and then died in 2012.

What are the filing requirements for those trusts?

It is important to identify what type of trust you have because this directly affects your tax filing requirements relative to the trust.

When a revocable trust is created, the law treats the trust as simply an extension of your property for all purposes except probate.

This means that any trust income is simply your income, so you just include that income on your personal tax return each year.

In other words, you file a 1040 “U.S. Individual Income Tax Return” adding any income from the trust to that return. Continue reading →